PHOTO: NZ Property Market. FILE
OPINION PIECE – Property Noise Group
There is one simply reason why the Labour Government does not care about the rampant property market in New Zealand.
ANSWER: It is artificially propping up a COVID 19 economy
Tony Alexander puts his take on it –25 Reasons Why House Prices Are Rising – and Counting
Our take is this:
- Historically low interest rates – means you are paying more for your property purchase – means that seller spends those profits in part in the economy. It is simply Mortgage Money fueling the economy via property sales.
- NZ banks have been told to LEND LEND LEND –New mortgage commitments sky rocket | Reserve Bank
- Feel good. Own a property? Do not underestimate the SMUG FACTOR. The problem is – sell your property for 3 x what you paid for it, and then start looking to replace that property. Not so SMUG now eh? All well and good if you are an investor cashing out though – but do we need to retain the percentage of rental stock in NZ.
- The New Zealand Labour Government has SOLD out first homebuyers – to take the sting out of the impact of C0VID 19. They will show you the statistics and say plenty of first homebuyers are buying – and they are but they are borrowing $800k plus to do so? Good? In a rising property market sure, but when it comes back in price, what then?
There answer has been this:
There is 36% percent less $$$ circulating in our economy due to closed borders so lets artificially inflate house prices – so those sellers will spend parts of those profits to prop up the economy
Rising house prices – is the only tool in the shed that Jacinda Adern and her government are using to make us seem the the economy is ok
The real issue is – The Property Correction. It will come – it always does and those first home buyers that have a massive mortgage at 2. 49 percent now will one day face 6 – 7 – 8 percent plus mortgage rates. Not yet – but they will.